Coinbase’s balance sheet shrank drastically after the cryptocurrency exchange removed customer-held digital assets and liabilities due to an accounting change. Assets fell from $291 billion to $23 billion, while liabilities dropped from $282 billion to $12 billion. The shift follows the SEC’s rescission of Staff Accounting Bulletin No. 121, which previously required crypto custodians to report customer assets on their balance sheets. Coinbase maintains that customers own their digital tokens, but it acknowledges legal uncertainty over whether those assets could be considered company property in bankruptcy. The accounting change could open the door for more banks to enter the crypto custody business, increasing competition for Coinbase.
